Being faced with the decision to file for bankruptcy can put you under a lot of stress. It can seem like your financial options are limited. However, even if you have a poor credit score, you can still live your life and get some of the things you are looking for, like a car or a home.
It is simple math – when you owe more than you are able to pay off, a bankruptcy is the likely solution. If you are in this position, you need to be familiar with the laws in your area. Every state has a separate law having to do with bankruptcy. Some states protect your home, and others do not. Make sure you know the laws where you live before you file.
Check the accuracy of all information on your credit report before you file for bankruptcy. Clear up any wrong, outdated, or other mistakes such as collections you already paid or credit cards you shut down.
It can be difficult to obtain unsecured credit for a number of years after you file for bankruptcy. But you can apply for secured credit cards to help rebuild your credit. That will show lenders that you are committed to rebuilding your credit. After a time, you are going to be able to have unsecured credit cards too.
Find a bankruptcy attorney who offers free consultations, and ask lots of questions. Almost all lawyers will give a free consultation, so meet with more than one before making a decision on whom to hire. Do not make any final decisions until every question you have has been answered. After your consultation, take your time to make your decision. So, this gives you plenty of time to consult with several attorneys.
If bankruptcy is an option for you, secure the services of an attorney. It is unlikely that you will be able to comprehend all the various rules and regulations involved in bankruptcy law. Choose an attorney who specializes in personal bankruptcy to make sure you don’t make mistakes.
Chapter 7 vs Chapter 13 Bankruptcy
Be certain that you can differentiate between Chapter 7 and Chapter 13 bankruptcy. Chapter 7, for example, will wipe away every one of your outstanding debts. You will be removed from any contracts you have with your creditors. But you have to qualify for Chapter 7 – not everybody can qualify for it.
With a Chapter 13 bankruptcy, on the other hand, your debt is not wiped out. It is consolidated into one big pile, and you are put on a payment plan to pay it off over the next 5 years. Both Chapter 7 and Chapter 13 filings have their own advantages and disadvantages, so do your research before deciding which one you’d like to go after.
Did you know that statistically speaking, more people file for bankruptcy than file for divorce every year? So think about how many people you know who have gotten a divorce, and that’s roughly the same amount of people you know who have filed for bankruptcy. There is no shame in bankruptcy – you are in good company. It’s a fresh start to life.
So don’t hide from your friends and family while you go through bankruptcy. Bankruptcy proceedings can be extremely harsh on some people’s emotions. It can be long, full of stress, and leaves some individuals having feelings of shame and guilt. Some people do not even want to speak with others until the bankruptcy is official. But, isolating yourself from others could bring out more depression. It is important that you continue to spend quality time with your loved ones despite, in spite of your current financial situation.
Bankruptcy is a step that many people have to take, and as you can see, it’s not a permanent black mark. When saving money, you’re showing the lenders that you wish to rebuild your credibility. They’ll appreciate it. Make the efforts to save and look at the impact it has when you attempt to make a home or car purchase.
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